The Dreyfus Socially Responsible Growth Fund, Inc.

Transcription

1 The Dreyfus Socially Responsible Growth Fund, Inc. ANNUAL REPORT December 31, 2015

2 The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. Not FDIC-Insured Not Bank-Guaranteed May Lose Value

3 Contents T H E F U N D A Letter from the President 2 Discussion of Fund Performance 3 Fund Performance 5 Understanding Your Fund s Expenses 6 Comparing Your Fund s Expenses With Those of Other Funds 6 Statement of Investments 7 Statement of Assets and Liabilities 11 Statement of Operations 12 Statement of Changes in Net Assets 13 Financial Highlights 14 Notes to Financial Statements 16 Report of Independent Registered Public Accounting Firm 24 Important Tax Information 25 Information About the Renewal of the Fund s Management Agreement 26 Board Members Information 30 Officers of the Fund 33 F O R M O R E I N F O R M AT I O N Back Cover

4 The Dreyfus Socially Responsible Growth Fund, Inc. The Fund A LETTER FROM THE PRESIDENT Dear Shareholder: We are pleased to present this annual report for The Dreyfus Socially Responsible Growth Fund, Inc., covering the 12-month period from January 1, 2015, through December 31, For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow was a year of varied and, at times, conflicting economic influences. On one hand, the U.S. economy continued to grow as domestic labor markets posted significant gains, housing markets recovered, and lower fuel prices put cash in consumers pockets. Indeed, these factors, along with low inflation, prompted the Federal Reserve Board in December to raise short-term interest rates for the first time in nearly a decade. On the other hand, the global economy continued to disappoint, particularly in China and other emerging markets, when reduced industrial demand and declining currency values sparked substantial declines in commodity prices. Although several broad measures of stock and bond performance ended 2015 roughly unchanged, high levels of volatility prevailed across most financial markets. Among U.S. equities, moderate gains from consumer discretionary and health care stocks were balanced by pronounced weakness in the energy and materials sectors. Bonds also saw bifurcated performance, with municipal bonds and intermediate-term U.S. government securities faring well compared to high yield and emerging-markets debt. Market volatility is likely to persist until investors see greater clarity from the global economy. We expect to see wide differences in underlying fundamental and technical influences across various asset classes, economic sectors, and regional markets in 2016, suggesting that selectivity may be an important determinant of investment success. As always, we encourage you to discuss the implications of our observations with your financial advisor. Thank you for your continued confidence and support. Sincerely, J. Charles Cardona President The Dreyfus Corporation January 15,

5 DISCUSSION OF FUND PERFORMANCE For the reporting period of January 1, 2015, through December 31, 2015, as provided by C. Wesley Boggs, William S. Cazalet, CAIA, and Ronald P. Gala, CFA, Portfolio Managers Fund and Market Performance Overview For the 12-month period ended December 31, 2015, The Dreyfus Socially Responsible Growth Fund s Initial shares produced a total return of 3.20%, and the fund s Service shares returned 3.41%. 1 In comparison, the fund s benchmark, the Standard & Poor s 500 Composite Stock Price Index ( S&P 500 Index ), produced a total return of 1.39% for the same period. 2 Mildly positive stock market results during 2015 masked heightened volatility amid shifting economic sentiment. The fund underperformed its benchmark, mainly due to shortfalls from our quantitative stock ranking process and environmental, social, and corporate governance (ESG) ratings. The Fund s Investment Approach The fund seeks capital growth, with current income as a secondary objective. To pursue these goals, the fund invests at least 80% of its net assets in the common stocks of companies that, in our opinion, meet traditional investment standards while simultaneously conducting their businesses in a manner that contributes to the enhancement of the quality of life in America. In selecting stocks, we use quantitative research to identify and rank stocks within an industry or sector. Next, using fundamental analysis, we designate the most attractive of the higher ranked securities as potential purchase candidates. We then evaluate whether each company meets the fund s socially responsible investment criteria in order to determine whether the company is eligible for purchase or retention by the fund. With respect to those eligible securities, we then select investments that we consider to be the most attractive based on financial considerations. The fund normally focuses on large-cap growth stocks; however, the fund also may invest in value-oriented stocks, midcap stocks and small-cap stocks. Global Economic Concerns Sparked Market Turmoil Employment gains helped drive the S&P 500 Index higher from the start of 2015 through the end of February despite plummeting energy prices. Stocks reversed course in March when severe winter weather and a strengthening U.S. dollar dampened economic growth, but the U.S. economy soon regained traction, and by May, the benchmark had advanced to new record highs. However, uncertainty surrounding a debt crisis in Greece and slowing growth in China sent stock prices lower over the summer. In August, the Chinese central bank unexpectedly devalued the country s currency, intensifying global economic concerns. Stocks dipped into negative territory as investors grew more riskaverse, but a strong October rally erased previous losses. Stock prices remained volatile over the remainder of the year amid renewed worries that global instability might dampen domestic economic growth. The market rebounded somewhat near year-end when the Federal Reserve Board raised short-term interest rates, ending months of uncertainty and enabling the S&P 500 Index to close 2015 in positive territory. Quantitative Models Dampened Relative Results The fund lagged its benchmark in 2015 as global macroeconomic developments took investors focus away from company fundamentals and hurt the efficacy of stock picking. In addition, because some large companies are ineligible for the fund due to low environmental, social, and 3

6 DISCUSSION OF FUND PERFORMANCE (continued) corporate governance (ESG) ratings, the fund maintained a bias toward smaller companies, which generally underperformed their larger counterparts. For similar reasons, the fund held underweighted exposure to the strong-performing consumer discretionary sector. For example, the fund did not hold Internet retailer Amazon.com which more than doubled in value but ranks low on corporate governance, toxic emissions, labor relations, and health and safety factors. Apparel maker PVH Corp. fell sharply after releasing disappointing quarterly earnings. In the information technology sector, Alphabet (formerly Google) gained considerable value, but the fund held underweighted exposure due to the company s BBB ESG rating and low ranking in one of our models. Meanwhile, data analysis specialist Teradata struggled after revenues fell below expectations due to customers deferring contracts and trading down to lower-end products. Among energy companies, Spectra Energy was hurt by plummeting oil prices. The fund achieved better results in the consumer staples sector. Household goods maker Clorox advanced when strong organic sales growth drove earnings higher, and food-and-beverage company Mondelez International expanded its revenues and profits in an otherwise challenging global marketplace. In the health care sector, medical equipment producer PerkinElmer s environmental health business benefited from improving food safety trends in China, and rising birth rates and stronger blood screenings helped its diagnostic business. In other areas, International Flavors & Fragrances posted strong organic growth, and oil refiner Marathon Petroleum benefited from lower input costs and higher profit margins. Maintaining a Disciplined Approach Although our quantitative process does not directly consider macroeconomic factors, it is worth noting that the U.S. economy has continued to grow despite global economic instability. As of year-end, our models have continued to identify opportunities meeting our criteria for attractive valuations, earnings quality, behavioral factors, and social responsibility. We have maintained mildly overweighted exposure to the health care and information technology sectors, and underweighted exposure to the consumer staples and industrial sectors. January 15, 2016 Equity funds are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund s prospectus. The fund s socially responsible investment criteria may limit the number of investment opportunities available to the fund, and as a result, at times, the fund may produce more modest gains than funds that are not subject to such special investment considerations. The fund is only available as a funding vehicle under variable life insurance policies or variable annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund directly. A variable annuity is an insurance contract issued by an insurance company that enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals. The investment objective and policies of The Dreyfus Socially Responsible Growth Fund, Inc. made available through insurance products may be similar to other funds managed by Dreyfus. However, the investment results of the fund may be higher or lower than, and may not be comparable to, those of any other Dreyfus fund. 1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund s performance does not reflect the deduction of additional charges and expenses imposed in connection with investing in variable insurance contracts, which will reduce returns. 2 SOURCE: LIPPER INC. Reflects reinvestment of dividends and, where applicable, capital gain distributions. The Standard & Poor s 500 Composite Stock Price Index is a widely accepted, unmanaged index of U.S. stock market performance. Investors cannot invest directly in any index. 4

7 FUND PERFORMANCE 23,500 19,500 The Dreyfus Socially Responsible Growth Fund, Inc. (Initial shares) The Dreyfus Socially Responsible Growth Fund, Inc. (Service shares) Standard & Poor s 500 Composite Stock Price Index $20,234 $19,761 $19,278 Dollars 15,500 11,500 7, Years Ended 12/31 Comparison of change in value of $10,000 investment in The Dreyfus Socially Responsible Growth Fund, Inc. Initial shares and Service shares and the Standard & Poor s 500 Composite Stock Price Index Average Annual Total Returns as of 12/31/15 1 Year 5 Years 10 Years Initial shares -3.20% 10.76% 7.05% Service shares -3.41% 10.48% 6.78% Standard & Poor's 500 Composite Stock Price Index 1.39% 12.55% 7.30% Source: Lipper Inc. Past performance is not predictive of future performance. The fund s performance shown in the graph and table does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The fund s performance does not reflect the deduction of additional charges and expenses imposed in connection with investing in variable insurance contracts which will reduce returns. The above graph compares a $10,000 investment made in Initial and Service shares of The Dreyfus Socially Responsible Growth Fund, Inc. on 12/31/05 to a $10,000 investment made in the Standard & Poor s 500 Composite Stock Price Index (the Index ) on that date. The fund s Initial shares are not subject to a Rule 12b-1 fee. The fund s Service shares are subject to a 0.25% annual Rule 12b-1 fee. All dividends and capital gain distributions are reinvested. The fund s performance shown in the line graph above takes into account all applicable fund fees and expenses for Initial and Service shares. The Index is a widely accepted, unmanaged index of U.S. stock market performance. Unlike a mutual fund, the Index is not subject to charges, fees and other expenses. Investors cannot invest directly in any index. Further information relating to fund performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the prospectus and elsewhere in this report. 5

8 UNDERSTANDING YOUR FUND S EXPENSES (Unaudited) As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads), redemption fees and expenses associated with variable annuity or insurance contracts, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund s prospectus or talk to your financial adviser. Review your fund s expenses The table below shows the expenses you would have paid on a $1,000 investment in The Dreyfus Socially Responsible Growth Fund, Inc. from July 1, 2015 to December 31, It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses. Expenses and Value of a $1,000 Investment assuming actual returns for the six months ended December 31, 2015 Initial Shares Service Shares Expenses paid per $1,000 $ 4.31 $ 5.55 Ending value (after expenses) $ $ COMPARING YOUR FUND S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited) Using the SEC s method to compare expenses The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period. Expenses and Value of a $1,000 Investment assuming a hypothetical 5% annualized return for the six months ended December 31, 2015 Initial Shares Service Shares Expenses paid per $1,000 $ 4.43 $ 5.70 Ending value (after expenses) $ 1, $ 1, Expenses are equal to the fund s annualized expense ratio of.87% for Initial shares and 1.12% for Service shares, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). 6

9 STATEMENT OF INVESTMENTS December 31, 2015 Common Stocks % Shares Value ($) Banks - 2.9% Comerica 27,800 1,162,874 People's United Financial 116,600 a 1,883,090 PNC Financial Services Group 40,700 3,879,117 Capital Goods - 4.6% 6,925,081 3M 34,050 5,129,292 Cummins 25,700 2,261,857 General Electric 105,050 3,272,308 Snap-on 1, ,003 Consumer Durables & Apparel - 3.4% 10,963,460 NIKE, Cl. B 83,800 5,237,500 PVH 38,500 2,835,525 Consumer Services - 1.2% 8,073,025 Marriott International, Cl. A 41,050 a 2,751,992 Diversified Financials - 5.9% American Express 41,050 2,855,028 Franklin Resources 24, ,362 Legg Mason 33,400 1,310,282 Morgan Stanley 16, ,960 Northern Trust 56,600 4,080,294 T. Rowe Price Group 60,750 4,343,017 Energy - 7.1% 13,984,943 Baker Hughes 24,500 1,130,675 Exxon Mobil 10, ,680 Hess 41,350 2,004,648 Marathon Petroleum 93,200 4,831,488 Phillips 66 13,350 1,092,030 Spectra Energy 129,750 3,106,215 Tesoro 2, ,573 Valero Energy 49,200 3,478,932 Food, Beverage & Tobacco - 5.5% 16,760,241 Campbell Soup 29,800 a 1,565,990 Coca-Cola Enterprises 90,850 4,473,454 7

10 STATEMENT OF INVESTMENTS (continued) Common Stocks % (continued) Shares Value ($) Food, Beverage & Tobacco - 5.5% (continued) General Mills 4, ,768 Mondelez International, Cl. A 101,400 4,546,776 PepsiCo 22,100 2,208,232 Health Care Equipment & Services - 5.8% 13,071,220 AmerisourceBergen 38,400 3,982,464 Cardinal Health 50,100 4,472,427 Cigna 9,700 1,419,401 Henry Schein 24,100 b 3,812,379 Household & Personal Products - 1.5% 13,686,671 Clorox 27,450 3,481,484 Insurance - 5.4% ACE 42,300 4,942,755 Marsh & McLennan 49,900 2,766,955 Travelers 44,600 5,033,556 Materials - 3.0% 12,743,266 Ecolab 35,150 4,020,457 International Flavors & Fragrances 25,200 3,014,928 Media - 5.5% 7,035,385 Discovery Communications, Cl. A 46,900 a,b 1,251,292 Time Warner 60,300 3,899,601 Time Warner Cable 16,150 2,997,279 Walt Disney 47,700 5,012,316 Pharmaceuticals, Biotechnology & Life Sciences % 13,160,488 Agilent Technologies 106,050 4,433,950 Biogen 9,150 b 2,803,102 Gilead Sciences 64,750 6,552,052 Johnson & Johnson 16,400 1,684,608 Merck & Co. 101,800 5,377,076 PerkinElmer 30,400 1,628,528 Waters 32,450 b 4,367,121 Zoetis 93,600 4,485,312 Retailing - 2.7% 31,331,749 Best Buy 8,000 a 243,600 8

11 Common Stocks % (continued) Shares Value ($) Retailing - 2.7% (continued) Signet Jewelers 21,200 2,622,228 Tiffany & Co. 46,700 3,562,743 Semiconductors & Semiconductor Equipment - 4.2% 6,428,571 Avago Technologies 19,800 a 2,873,970 Intel 24, ,135 NVIDIA 125,900 4,149,664 Skyworks Solutions 27,300 2,097,459 Software & Services % 9,958,228 Accenture, Cl. A 49,650 5,188,425 Alphabet, Cl. A 1,500 b 1,167,015 Alphabet, Cl. C 1,500 b 1,138,320 Electronic Arts 53,300 b 3,662,776 Intuit 26,450 2,552,425 Microsoft 142,750 7,919,770 Symantec 50 1,050 Teradata 50,300 b 1,328,926 Xerox 160,300 1,703,989 Technology Hardware & Equipment - 8.8% 24,662,696 Apple 107,100 11,273,346 Cisco Systems 182,175 4,946,962 Corning 191,500 3,500,620 EMC 49,625 1,274,370 Telecommunication Services - 1.4% 20,995,298 CenturyLink 129,000 3,245,640 Verizon Communications 4, ,880 Transportation - 2.4% 3,430,520 Expeditors International of Washington 19, ,940 Southwest Airlines 113,200 4,874,392 Utilities - 4.1% 5,749,332 Exelon 156,900 4,357,113 NextEra Energy 51,400 5,339,946 9,697,059 Total Common Stocks (cost $199,472,035) 234,890,709 9

12 STATEMENT OF INVESTMENTS (continued) Other Investment - 1.0% Shares Value ($) Registered Investment Company; Dreyfus Institutional Preferred Plus Money Market Fund (cost $2,404,446) 2,404,446 c 2,404,446 Investment of Cash Collateral for Securities Loaned -.9% Registered Investment Company; Dreyfus Institutional Cash Advantage Fund (cost $2,079,721) 2,079,721 c 2,079,721 Total Investments (cost $203,956,202) 100.9% 239,374,876 Liabilities, Less Cash and Receivables (.9%) (2,022,757) Net Assets 100.0% 237,352,119 a Security, or portion thereof, on loan. At December 31, 2015, the value of the fund s securities on loan was $7,821,086 and the value of the collateral held by the fund was $8,084,890, consisting of cash collateral of $2,079,721 and U.S. Government & Agency securities valued at $6,005,169. b Non-income producing security. c Investment in affiliated money market mutual fund. Portfolio Summary (Unaudited) Value (%) Pharmaceuticals, Biotechnology & Life Sciences 13.2 Software & Services 10.4 Technology Hardware & Equipment 8.8 Energy 7.1 Diversified Financials 5.9 Health Care Equipment & Services 5.8 Media 5.5 Food, Beverage & Tobacco 5.5 Insurance 5.4 Capital Goods 4.6 Semiconductors & Semiconductor Equipment 4.2 Utilities 4.1 Consumer Durables & Apparel 3.4 Materials 3.0 Banks 2.9 Retailing 2.7 Transportation 2.4 Money Market Investments 1.9 Household & Personal Products 1.5 Telecommunication Services 1.4 Consumer Services Based on net assets. See notes to financial statements. 10

13 STATEMENT OF ASSETS AND LIABILITIES December 31, 2015 Cost Value Assets ($): Investments in securities See Statement of Investments (including securities on loan, valued at $7,821,086) Note 1(b): Unaffiliated issuers 199,472, ,890,709 Affiliated issuers 4,484,167 4,484,167 Cash 36,383 Dividends and securities lending income receivable 321,804 Prepaid expenses 8, ,741,677 Liabilities ($): Due to The Dreyfus Corporation and affiliates Note 3(c) 173,707 Liability for securities on loan Note 1(b) 2,079,721 Payable for shares of Common Stock redeemed 34,989 Accrued expenses 101,141 2,389,558 Net Assets ($) 237,352,119 Composition of Net Assets ($): Paid-in capital 176,348,136 Accumulated undistributed investment income net 2,958,265 Accumulated net realized gain (loss) on investments 22,627,044 Accumulated net unrealized appreciation (depreciation) on investments 35,418,674 Net Assets ($) 237,352,119 Net Asset Value Per Share Initial Shares Service Shares Net Assets ($) 227,482,967 9,869,152 Shares Outstanding 5,899, ,429 Net Asset Value Per Share ($) See notes to financial statements. 11

14 STATEMENT OF OPERATIONS Year Ended December 31, 2015 Investment Income ($): Income: Cash dividends: Unaffiliated issuers 5,246,291 Affiliated issuers 2,236 Income from securities lending Note 1(b) 8,871 Total Income 5,257,398 Expenses: Management fee Note 3(a) 1,974,147 Professional fees 92,342 Prospectus and shareholders reports 78,143 Directors fees and expenses Note 3(d) 68,672 Distribution fees Note 3(b) 26,453 Custodian fees Note 3(c) 24,787 Loan commitment fees Note 2 2,532 Shareholder servicing costs Note 3(c) 1,871 Miscellaneous 26,744 Total Expenses 2,295,691 Less reduction in fees due to earnings credits Note 3(c) (5) Net Expenses 2,295,686 Investment Income Net 2,961,712 Realized and Unrealized Gain (Loss) on Investments Note 4 ($): Net realized gain (loss) on investments 22,653,145 Net unrealized appreciation (depreciation) on investments (33,587,174) Net Realized and Unrealized Gain (Loss) on Investments (10,934,029) Net (Decrease) in Net Assets Resulting from Operations (7,972,317) See notes to financial statements. 12

15 STATEMENT OF CHANGES IN NET ASSETS Year Ended December 31, Operations ($): Investment income net 2,961,712 2,774,159 Net realized gain (loss) on investments 22,653,145 35,125,017 Net unrealized appreciation (depreciation) on investments (33,587,174) (3,224,985) Net Increase (Decrease) in Net Assets Resulting from Operations (7,972,317) 34,674,191 Dividends to Shareholders from ($): Investment income net: Initial Shares (2,689,794) (2,824,636) Service Shares (85,867) (79,619) Net realized gain on investments: Initial Shares (33,743,127) (18,473,730) Service Shares (1,384,964) (647,248) Total Dividends (37,903,752) (22,025,233) Capital Stock Transactions ($): Net proceeds from shares sold: Initial Shares 12,284,196 25,341,730 Service Shares 1,679,368 1,819,641 Dividends reinvested: Initial Shares 36,432,921 21,298,366 Service Shares 1,470, ,867 Cost of shares redeemed: Initial Shares (47,663,749) (53,057,045) Service Shares (2,090,656) (1,143,249) Increase (Decrease) in Net Assets from Capital Stock Transactions 2,112,911 (5,013,690) Total Increase (Decrease) in Net Assets (43,763,158) 7,635,268 Net Assets ($): Beginning of Period 281,115, ,480,009 End of Period 237,352, ,115,277 Undistributed investment income net 2,958,265 2,772,856 Capital Share Transactions (Shares): Initial Shares Shares sold 294, ,802 Shares issued for dividends reinvested 885, ,577 Shares redeemed (1,165,121) (1,207,470) Net Increase (Decrease) in Shares Outstanding 14,884 (120,091) Service Shares Shares sold 41,251 41,632 Shares issued for dividends reinvested 36,032 17,672 Shares redeemed (52,097) (26,392) Net Increase (Decrease) in Shares Outstanding 25,186 32,912 See notes to financial statements. 13

16 FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. The fund s total returns do not reflect expenses associated with variable annuity or insurance contracts. These figures have been derived from the fund s financial statements. Year Ended December 31, Initial Shares Per Share Data ($): Net asset value, beginning of period Investment Operations: Investment income net a Net realized and unrealized gain (loss) on investments (1.54) Total from Investment Operations (1.07) Distributions: Dividends from investment income net (.47) (.48) (.48) (.26) (.27) Dividends from net realized gain on investments (5.87) (3.16) Total Distributions (6.34) (3.64) (.48) (.26) (.27) Net asset value, end of period Total Return (%) (3.20) Ratios/Supplemental Data (%): Ratio of total expenses to average net assets Ratio of net expenses to average net assets Ratio of net investment income to average net assets Portfolio Turnover Rate Net Assets, end of period ($ x 1,000) 227, , , , ,013 a Based on average shares outstanding. See notes to financial statements. 14

17 Year Ended December 31, Service Shares Per Share Data ($): Net asset value, beginning of period Investment Operations: Investment income net a Net realized and unrealized gain (loss) on investments (1.52) Total from Investment Operations (1.16) Distributions: Dividends from investment income net (.36) (.39) (.39) (.18) (.20) Dividends from net realized gain on investments (5.87) (3.16) Total Distributions (6.23) (3.55) (.39) (.18) (.20) Net asset value, end of period Total Return (%) (3.41) Ratios/Supplemental Data (%): Ratio of total expenses to average net assets Ratio of net expenses to average net assets Ratio of net investment income to average net assets Portfolio Turnover Rate Net Assets, end of period ($ x 1,000) 9,869 10,632 8,767 6,552 6,167 a Based on average shares outstanding. See notes to financial statements. 15

18 NOTES TO FINANCIAL STATEMENTS NOTE 1 Significant Accounting Policies: The Dreyfus Socially Responsible Growth Fund, Inc. (the fund ) is registered under the Investment Company Act of 1940, as amended (the Act ), as a diversified open-end management investment company.the fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. The fund s investment objective is to seek to provide capital growth. The Dreyfus Corporation (the Manager or Dreyfus ), a whollyowned subsidiary of The Bank of New York Mellon Corporation ( BNY Mellon ), serves as the fund s investment adviser. MBSC Securities Corporation (the Distributor ), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund s shares, which are sold without a sales charge. The fund is authorized to issue 150 million shares of $.001 par value Common Stock in each of the following classes of shares: Initial and Service. Initial shares are subject to a Shareholder Services Plan fee and Service shares are subject to a Distribution Plan fee. Each class of shares has identical rights and privileges, except with respect to the Distribution Plan, Shareholder Services Plan and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. The Financial Accounting Standards Board ( FASB ) Accounting Standards Codification ( ASC ) is the exclusive reference of authoritative U.S. generally accepted accounting principles ( GAAP ) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission ( SEC ) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates. The fund enters into contracts that contain a variety of indemnifications. The fund s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements. (a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement 16

19 date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods. Various inputs are used in determining the value of the fund s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below: Level 1 unadjusted quoted prices in active markets for identical investments. Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). Level 3 significant unobservable inputs (including the fund s own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund s investments are as follows: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of 17

20 NOTES TO FINANCIAL STATEMENTS (continued) the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and financial futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy. When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the fund s Board of Directors (the Board ). Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used. For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are generally categorized within Level 3 of the fair value hierarchy. The following is a summary of the inputs used as of December 31, 2015 in valuing the fund s investments: Level 1 - Unadjusted Quoted Prices Level 2 - Other Significant Observable Inputs Level 3 - Significant Unobservable Inputs Total Assets ($) Investments in Securities: Equity Securities - Domestic Common Stocks 229,394, ,394,511 Equity Securities - Foreign Common Stocks 5,496, ,496,198 Mutual Funds 4,484, ,484,167 See Statement of Investments for additional detailed categorizations. 18

21 At December 31, 2015, there were no transfers between levels of the fair value hierarchy. (b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis. Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, the fund may lend securities to qualified institutions. It is the fund s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by Dreyfus, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund s rights against the borrower and the collateral. During the period ended December 31, 2015, The Bank of New York Mellon earned $2,005 from lending portfolio securities, pursuant to the securities lending agreement. (c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as affiliated under the Act. Investments in affiliated investment companies during the period ended December 31, 2015 were as follows: 19

22 NOTES TO FINANCIAL STATEMENTS (continued) Affiliated Investment Company Value Value 12/31/2014 ($) Purchases ($) Sales ($) 12/31/2015 ($) Net Assets (%) Dreyfus Institutional Preferred Plus Money Market Fund 3,814,776 30,672,451 32,082,781 2,404, Dreyfus Institutional Cash Advantage Fund 1,507,543 34,177,442 33,605,264 2,079,721.9 Total 5,322,319 64,849,893 65,688,045 4,484, (d) Dividends to shareholders: Dividends are recorded on the exdividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the Code ). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. (e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. As of and during the period ended December 31, 2015, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended December 31, 2015, the fund did not incur any interest or penalties. Each tax year in the four-year period ended December 31, 2015 remains subject to examination by the Internal Revenue Service and state taxing authorities. At December 31, 2015, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $2,958,265, undistributed capital gains $22,690,686 and unrealized appreciation $35,355,032. The tax character of distributions paid to shareholders during the fiscal periods ended December 31, 2015 and December 31, 2014 were as 20

23 follows: ordinary income $4,666,391 and $3,658,185, and long-term capital gains $33,237,361 and $18,367,048, respectively. During the period ended December 31, 2015, as a result of permanent book to tax differences, primarily due to dividend reclassification, the fund decreased accumulated undistributed investment income-net by $642 and increased accumulated net realized gain (loss) on investments by the same amount. Net assets and net asset value per share were not affected by this reclassification. NOTE 2 Bank Lines of Credit: The fund participates with other Dreyfus-managed funds in a $480 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a Facility ), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. Prior to October 7, 2015, the unsecured credit facility with Citibank, N.A. was $430 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended December 31, 2015, the fund did not borrow under the Facilities. NOTE 3 Management Fee and Other Transactions with Affiliates: (a) Pursuant to management agreement with Dreyfus, the management fee is computed at the annual rate of.75% of the value of the fund s average daily net assets and is payable monthly. (b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing its shares, for servicing and/or maintaining Service shares shareholder accounts and for advertising and marketing for Service shares. The Distribution Plan provides for payments to be made at an annual rate of.25% of the value of the Service shares average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. During the period ended December 31, 2015, Service shares were charged $26,453 pursuant to the Distribution Plan. (c) Under the Shareholder Services Plan, Initial shares reimburse the Distributor at an amount not to exceed an annual rate of.25% of the value of its average daily net assets for certain allocated expenses with respect to 21

24 NOTES TO FINANCIAL STATEMENTS (continued) servicing and/or maintaining Initial shares shareholder accounts. During the period ended December 31, 2015, Initial shares were charged $105 pursuant to the Shareholders Services Plan. The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations. The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended December 31, 2015, the fund was charged $1,466 for transfer agency services and $111 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were partially offset by earnings credits of $5. The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended December 31, 2015, the fund was charged $24,787 pursuant to the custody agreement. During the period ended December 31, 2015, the fund was charged $10,946 for services performed by the Chief Compliance Officer and his staff. The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consist of: management fees $152,745, Distribution Plan fees $2,113, custodian fees $16,000, Chief Compliance Officer fees $2,647 and transfer agency fees $202. (d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets. NOTE 4 Securities Transactions: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended December 31, 2015, amounted to $154,768,438 and $186,309,492, respectively. 22

25 At December 31, 2015, the cost of investments for federal income tax purposes was $204,019,844; accordingly, accumulated net unrealized appreciation on investments was $35,355,032, consisting of $45,620,482 gross unrealized appreciation and $10,265,450 gross unrealized depreciation. 23

26 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and Board of Directors The Dreyfus Socially Responsible Growth Fund, Inc. We have audited the accompanying statement of assets and liabilities of The Dreyfus Socially Responsible Growth Fund, Inc., including the statement of investments, as of December 31, 2015, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2015 by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Dreyfus Socially Responsible Growth Fund, Inc. at December 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles. New York, New York February 11,

27 IMPORTANT TAX INFORMATION (Unaudited) For federal tax purposes, the fund hereby reports 100% of the ordinary dividends paid during the fiscal year ended December 31, 2015 as qualifying for the corporate dividends received deduction. Shareholders will receive notification in early 2016 of the percentage applicable to the preparation of their 2015 income tax returns. Also, the fund hereby reports $.3160 per share as a short-term capital gain distribution and $ per share as a long-term capital gain distribution paid on March 23,

28 INFORMATION ABOUT THE RENEWAL OF THE FUND S MANAGEMENT AGREEMENT (Unaudited) At a meeting of the fund s Board of Directors held on July 22-23, 2015, the Board considered the renewal of the fund s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the Agreement ). The Board members, a majority of whom are not interested persons (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from Dreyfus representatives. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered. Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered information provided to them at the meeting and in previous presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex. Dreyfus provided the number of open accounts in the fund, the fund s asset size and the allocation of fund assets among distribution channels. Dreyfus also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the Dreyfus fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or Dreyfus) and Dreyfus corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the fund. The Board also considered research support available to, and portfolio management capabilities of, the fund s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered Dreyfus extensive administrative, accounting and compliance infrastructures. The Board also considered portfolio management s brokerage policies and practices (including policies and practices regarding soft dollars) and the standards applied in seeking best execution. Comparative Analysis of the Fund s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Lipper, Inc. ( Lipper ), an independent provider of investment company data, which included information comparing (1) the fund s performance with the performance of a group of comparable funds ( Performance Group 1 ) and with a broader group of funds ( Performance Universe 1 ), with each group consisting of funds from the same Lipper category as that of the fund, all for various periods ended May 31, 2015, (2) at the request of Dreyfus, the fund s performance with the performance of a group of social criteria funds from various Lipper categories ( Performance Group 2 ) and with a broader group of social criteria funds ( Performance Universe 2 ), all for various periods ended May 31, 2015, 26